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17 April 2014, Thursday
 
 
Today's Zaman
 
 
 
 

Critical time for construction industry

10 May 2007, Thursday /TURHAN BOZKURT
In Turkey the construction sector, which has an estimated value of around $3.5 trillion globally, is undergoing an important change.
Projects launched one after another in recent years have prompted a great liveliness in the 220 supply sectors such as cement, sand, brick and glass. The booming market has in turn heated up the competition. The increasing production of construction materials has brought about a quality issue. In an attempt to eliminate the danger of companies putting low-quality products on the market to get a bigger profit share, the state has put into effect the by-law on construction materials with the aim of making the sector comply with EU standards. This development is expected to eradicate the long-standing problem of lack of supervision and open the gates to a new era. Most sector experts believe that the couple of years ahead will be crucial ones for the construction sector, hopefully winnowing the bad from the good.

The largest sector after the food and clothing sectors, the construction materials sector makes up 10 percent of the Turkey’s industry. In the last couple of years there has been a significant rise in the domestic consumption of construction materials and hardware supplies. A few large production companies make up around 80 percent of the entire market. There are about 100,000 producers, exporters, importers, wholesalers and retailers in the construction industry, and 20 DIY store chains.

Standing out in the 1980s as one of the industry branches bringing in the highest amount of foreign currency, the construction materials sector continued developing alongside the economy at the opening of the 1990s. In this decade there were stable rises in both production and exports. Following economic crises that emerged both at home and abroad in the mid-1990s the construction materials industry came face-to-face with shrinking demand, not helped by the stagnant domestic market. The shrinkage took its tool, especially in the aftermath of the Marmara earthquake in August 1999, and it continued into 2001 with another, more severe, economic crisis in Turkey. However the economic growth that took place after 2001 positively affected the sector and the construction industry alike. The DIY market did not really take off until 1994, owing to the economic elements, urban structure and the characteristics of Turkish society. Now though, the revenue of the DIY market in Turkey is estimated to be around $1.5 billion. Turkey has proved itself to be a major player in the construction materials industry, particularly in producing cement, iron, steel, ceramics and glass.

The biggest problem of the construction industry is the unfair competition offered by some firms that also engage in off-record production leading to the danger of low-quality products causing loss of life and damage to Turkey’s prestige. The Ministry of Public Works took an important step with regard to the standards and supervision of nearly 600 construction materials. In cooperation with the Ministry of Trade and Industry it launched supervision sessions in January. Production samples taken from different companies are inspected in authorized labs. If any incompliance with the standards is detected, fines of up to YTL 55,000 may be applied. Authorities say that the increased number of audits will strike a sharp blow to off-record producers.

 
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